Narendra Modi seeks to revive India's 'zombie factories', not abandon them

[V.Balasubramani]

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Narendra Modi seeks to revive India's 'zombie factories', not abandon them

KANPUR: At British India Corporation's textile factory in Kanpur, four men sit in a control room watching computerised gauges eight hours a day. When they are done, another group takes over, and then another, for 24 hours a day — much as they might at any major industrial plant.

The problem is, nothing is produced there.

The strange tale of British India Corporation is an example of how political patronage and India's strict labour laws keep publicly owned companies going long after they are insolvent.

Read more: Narendra Modi seeks to revive India's 'zombie factories', not abandon them - The Times of India

 

[prasad1]

Balaji,
Is it realistic?
Why waste good money after bad ones?
Sell the facility, pension the employees, and reduce the cost to taxpayer.

Productivity must be one of the parameters in any venture.

 

[V.Balasubramani]

Will the Union Government do something for the Nokia (Chennai) plant which has already announced to suspend its operations from November?

 

[V.Balasubramani]

I would like to share the following news item of last year which is quite relevant to the topic.

17 years after Binny Mills closed, staff get Rs 3.28cr from Centre.

CHENNAI: Seventy-two-year-old N Jayaraman is one among more than 800 workers of Binny Mills who got a compensation from the Union government after a nearly two-decade-long wait. The mill, which was shut in 1996, had left several thousand workers jobless. Union textiles minister Kavuru Sambasiva Rao on Saturday disbursed Rs 3.28 crore to 854 workers who lost jobs and assured that 260 more workers would be covered within a month under the government's textile workers' rehabilitation fund scheme. Several hundred displaced families turned up on the occasion.

Rao said, "Though legally government is not responsible for paying compensation to the workers in a private factory, the government cannot ignore their sufferings". The 1986 government policy provides interim relief to workers who lose jobs owing to closure of textile units after June 1985 in the private sector.

Read more: 17 years after Binny Mills closed, staff get Rs 3.28cr from Centre - The Times of India

 

[krish44]

every large private player uses a company of his group to show losses to save on tax.

they also show employees on the payrolls who do no better than BIC textile units workers

most of them also float charitable trusts to avail tax benefit.they also have ghost employees and relatives on payroll .

industrial sickness of plants of corporates is akin to healthy people taking medical leave.

they are not to be taken seriously .

only the employees do not know why some companies do not do well .

some companies by design are not expected to do well.

companies like nokia need to be heavily penalised as they have no legitimate reason for closure.

govt can come down heavily on them if they have the will.

they did it to IBM when janta party was in power .

vodafone is still nursing the wounds of retro tax.

corporates will behave if govt has good economists at the helm instead of a sick lawyer as finance minister.

 

[V.Balasubramani]

Balaji,
Is it realistic?
Why waste good money after bad ones?
Sell the facility, pension the employees, and reduce the cost to taxpayer.

Productivity must be one of the parameters in any venture.

Sir,

You are right.

I don’t think that Modi’s Government will act like the previous Government which initially had an idea to bail out King Fisher Airlines.

Please go through the following news item published in Hindu Business Line on 25[SUP]th[/SUP] Sept.,

HMT Watches, Hindustan Cables among 6 PSUs to be shut down

Heavy Industries Ministry to move Cabinet for ₹1,080-crore package for workers

The Heavy Industries Ministry will move the Cabinet with a proposal to shut down six sick central public sector undertakings, including HMT Watches.

“We will spend over ₹1,000 crore just for once, but the burden will end for ever,” Heavy Industries and Public Enterprises Minister Anand Geete said in a press conference. The companies are: HMT Watches, HMT Barings, HMT Chinar Watch, Hindustan Photo Films, Hindustan Cables and Tungbhadra Steel.

The Ministry plans to spend ₹1,080 crore towards one-time settlement through a voluntary retirement scheme for workers. The six companies have around 3,600 workers.

HMT Watches, which is a subsidiary of HMT Ltd, has already submitted a voluntary retirement/voluntary separation scheme to the Government for downsizing its manpower. At present, over 1,000 people are employed with the company and its annual wage bill is around ₹45 crore. The company is running losses since the past 15 years and is working with budgetary support from the Government.
After the closures, the Ministry would consider sale of assets to private companies, said Geete. Ministry officials said efforts were on to monetise vacant land available with 11 sick PSUs, which have an estimated 8,000 acres.

These six are out of the 32 PSUs under the Heavy Industries Department. Of these, five – NEPA, HMT Machine Tools, Nagaland Papers & Pull, HEC and Triveni Structurals – are being revived. Scooters India, another State-run company that was in red, had also started making profits, which is why the plan for its strategic sale had been put off, added the minister.

Listing the achievements of his Ministry, Geete said the plan for an ultra mega solar power park is on track. The proposal is to set up a 4,000-MW project with 1,000 MW in the first phase.

Read more: HMT Watches, Hindustan Cables among 6 PSUs to be shut down | Business Line